Reliance Industries starts production in Krishna-Godavari basin

New Delhi, Sep 21 (IANS) India’s largest private oil major, Reliance Industries Ltd (RIL), has started production of oil from the Krishna-Godavari (K-G) basin, its chairman Mukesh D. Ambani said Sunday.The initial production will be 5,000 barrels of oil a day, which will be ramped up to 550,000 barrels a day in the next six quarters. This will increase India’s domestic oil production by 40 percent.

According to Ambani, the company plans to become the largest deepwater developer in the world.

Gas production from the Krishna-Godavri basin is expected to start in first quarter of 2009. The K-G basin will bring down India’s import bill by Rs.1,000 billion per year, Ambani said.

The gas will be sold at a base price of $4.2 per mmbtu (million British thermal unit) compared to the $2.02 quoted by the Oil and Natural Gas Corp (ONGC).

The utilisation of the gas is still embroiled in controversy, with RIL and younger brother Anil Ambani’s Reliance Natural Resources Ltd locked in litigation in the Bombay High Court over sharing of natural gas from the K-G basin.

The next hearing is Sep 30.

Mukesh Ambani said RIL will also enter into the exploration and production of uranium.